From the inception, C's dreams of "synergies" have been murky. The architecture was created by sprinking Weill dust into the eyes of analysts who saw nothing but higher and higher earnings. The piles of poorly contrived investments are simply the result of a culture of push created long before the Prince arrived. But all is not lost.
Today's NYT has the following graphic:
There are now logical investors for each piece. The pieces on the left confirm C's natural business: a global banking franchise. C has tremendous clout and, if run by a banking culture, should be able to regain leadership in a wide-open space. The pieces on the right all have significant value and might each do very well.
Importantly, each piece on the right has a culture unrelated to a banking culture. To put the process of banking with its "just say no" driving principle into the mix with any other business with its "go for it" driving principle is to create the outcome we are experiencing. Breaking up is hard to do, but here we could look back on and see tremendous benefits of being forced to do the difficult on these Citi days.
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